Hemp farmers ended 2018 on a high note, with President Donald Trump signing into law the Farm Bill, legalizing hemp and its derivatives. This now provides hemp farmers the opportunity to demonstrate the many possibilities and advantages of supply chain traceability for agricultural products.
Passage of the Farm Bill
As of January 1, hemp, its seeds, and its extracts are off the country’s controlled substance list. In December, Trump signed the 2018 Farm Bill, allowing for licensed growing of the crop across the 50 states. The bill, which builds on a 2014 bill allowing for trials of the crop only in certain states, makes hemp producers eligible for organic certifications, crop insurance, agricultural research grants, and other federal programs.
Sen. Mitch McConnell of Kentucky initiated the hemp-related provision to the bill. “At a time when farm income is down and growers are struggling, industrial hemp is a bright spot of agriculture’s future,” McConnell said. “My provision in the farm bill will not only legalize domestic hemp, but it will also allow state departments of agriculture to be responsible for its oversight.”
Passage of the Farm Bill allows state and tribal governments to take over regulation of a crop related to, but far, far less potent than cannabis. Containing less than 0.3% of the psychoactive THC, hemp is often used in food and fiber. Cannabidiol (CBD) oil, for instance, is gaining attention as an anti-inflammatory and anti-anxiety aid. The market for CBD oil is expected to reach $22 billion by 2022.
“For the first time in nearly a hundred years, commercial hemp production will no longer be federally prohibited in the United States,” said Justin Strekal, political director at the National Organization for the Reform of Marijuana Laws (NORML) in a press release. “This represents a significant and long overdue shift in U.S. policy.”
Nevertheless, the close relationship of hemp to the still-federally illegal cannabis is expected to drive a need for farmers to provide comprehensive genetics and provenance information across the entire supply chain.
Hemp and the Agriculture Supply Chain
With regulations expected at the state level and a default Department of Agriculture (USDA) standard to be developed, hemp will be one of the most highly regulated agricultural products in the country. At the same time, its farmers are working in a fledgling industry, presented with the opportunity to get traceability right.
Several fresh food producers are already embracing blockchain technology to:
- Better meet consumer demand for information about food provenance
- Improve ability to trace contamination
- Increase response time in the event of a recall
Examples include the Food Trust, which comprises Walmart and Nestle S.A., or recent initiatives by Pacifical and Carrefour.
In recent years, many agricultural corporations are trying to gain a better understanding of their supply chains. The Sustainability Consortium found that larger companies currently use their understanding of segments of the supply chain to extrapolate important information. Greater overall transparency would make a big difference.
Enhanced hemp supply chain transparency could also help in dealing with the expected glut of supply. With rural states, such as Kentucky, ramping up production, and regulations loosening, Bethany Gomez, director of research for the Brightfield Group, predicted that more and more brands will be introducing CBD products at lower prices.
Plus, legalization will make it easier to conduct business with the hemp industry. Gomez predicts large chain retailers will look to stock the product on their shelves — but they will be looking for reputable suppliers.
As John Simmons, co-founder of Colorado-based CBD-infused snack brand Weller, told BevNet, “They want ‘clean lineage,’ so to speak.” Tracking that lineage can be made a lot easier with the technology now available for improving traceability end-to-end in the supply chain.